Starting a business is exciting, but the financial side can feel overwhelming, especially when you’re just starting to make an income. You’ve probably heard a lot of buzz about different ways to manage your business finances and all the things you should be doing, but what is the best method for ADHD entrepreneurs? If you’re anything like me, you need something simple that doesn’t take a lot of time each month that actually works. That’s where the Profit First method comes in. It’s not just another financial system; it’s a whole mindset shift that can set you up for long-term success without having to stress over complicated money management methods.

As a new entrepreneur, this is the perfect time to implement this method. I have used it for over six years, and it has been a game-changer. Once I realized I have ADHD, it helped me see why I have been so successful with this method! It aligns so well with our ADHD brains!

What Is the Profit First Method?

The Profit First method, created by Mike Michalowicz, flips the traditional business financial model on its head. Most entrepreneurs are taught that the formula for running a business looks like this:

Sales - Expenses = Profit

Basically, you make sales, cover your expenses, and whatever is left over is your salary/profit. But here’s the problem: there’s often nothing left over! For many new entrepreneurs, especially those of us with ADHD who struggle with impulse control or tend to get overwhelmed by all the details, the traditional model can lead to overspending, under-saving, and burnout. When there’s money in our bank accounts in can create spending temptation on the personal side, but also in our businesses.

Profit First changes the formula to:

Sales - Profit = Expenses

This means you prioritize paying yourself and your profits before anything else. You pay yourself, save for taxes, and then manage your business expenses based on what’s left. It forces you to be more mindful of your spending while ensuring that you’re actually making a profit and paying yourself regularly.

Why Profit First is Ideal for ADHD Entrepreneurs

As someone with ADHD, you know the struggle of staying on top of things—especially numbers, finances, and tasks that feel boring or complicated. We often live in a "now" mindset, which means if something isn't urgent or exciting, it tends to fall to the bottom of our to-do list. With Profit First, you don’t have to wrestle with complex accounting systems, keep your bookkeeping up to date, or remember to move money around weekly. The system is designed to be simple, clear, and ADHD-friendly. Here’s why it works so well:

• Structure: ADHD brains thrive on structure and clear steps. The Profit First method offers that structure by breaking your money into specific, purposeful accounts (more on that below).

• Reward-Based: (Hello dopamine!) Moving your profit first feels like an immediate reward, which can motivate you to stick with it. It taps into our need for immediate gratification.

• Less Overwhelm: Prioritizing profit and minimizing expenses helps reduce impulsive spending. You work with what’s available instead of constantly feeling like you’re in a financial free-fall.

• More Consistency on the Personal Side: Variable income as an entrepreneur can create a lot of headaches on the personal side. This system helps you to put yourself on a consistent salary from your business.

How to Get Started with Profit First as a New Entrepreneur

Here’s the good news: you don’t need to make much money to start using Profit First. Implementing it early in your business can set you up for long-term success, ensuring you build a sustainable business from the ground up. Let’s break it down step by step. These steps can feel like a lot, but the reward is worth taking action.

1. Set Up Multiple Bank Accounts

The foundation of Profit First is separating your business money into different bank accounts, each with a specific purpose. Here’s what you’ll need:

• Income Account: All your income goes here first.

• Profit Account: This is your reward for running the business. The amount here is designed for you to pay yourself a quarterly bonus as a reward for all your hard work.

• Owner's Compensation: This is your salary as the business owner. It’s different from profit because you’ll use this to pay your bills and cover personal expenses.

• Tax Account: No one likes to think about taxes, but you’ll need to save for them. This account helps ensure you aren’t scrambling come tax time. If you collect sales tax you can have one account for both income and sales taxes, or you can use a separate account for sales taxes.

• Operating Expenses: Whatever’s left after funding your other accounts goes here. You’ll use this to run your business (pay bills, invest in growth, etc.).

If you’re in Canada like me, having all of these accounts without adding a lot of fees can be a challenge. If you are a sole proprietor, having the accounts for income and operating expenses (and sales taxes if applicable) set up as business accounts and using personal accounts for the other can help you minimize your bank fees. Once these accounts are set up, you’ll regularly distribute income to each account based on predetermined percentages. The true Profit First method recommends you do this twice a month but you can switch that up based on what works for you. I personally move my money once a month and have some clients who do it weekly. It’s all based on what works best for you.

2. Determine Your Percentages

The next step is figuring out how much of your income should go into each account. For new entrepreneurs with higher expenses and lower income, I recommend starting with something simple like:

• Profit: 5%

• Owner's Compensation: 50%

• Taxes: 15%

• Operating Expenses: 30%

As your business grows, you can adjust these percentages, but the key is to start small and consistently stick with the process. The numbers above are a starting point, but tweak them if you feel like they don’t work for you! The important part is committing to setting aside money for each category every time you get paid.

As your income increases, it’s important to increase the tax %. Typically, this comes from lowering the percentage of your operating expenses.

3. Transfer Funds Regularly

The beauty of the Profit First method is that it doesn’t require constant micromanagement. Set up a schedule to transfer funds from your income account into the other accounts—weekly, bi-weekly, or monthly. Since ADHD brains love routine (even if we resist it), sticking to a regular schedule makes it easier to maintain. You can even set calendar reminders to help with this.

4. Start Small with Profit

Don’t get discouraged if you’re not raking in the cash just yet. The key to Profit First is consistency, not the profit size or how much you can pay yourself. Even if you can only put a small percentage toward your salary and profit initially, that’s okay! Over time, as your income grows, so will your salary and your profit.

5. Celebrate Your Wins

The ADHD brain loves rewards, and Profit First is about giving yourself that dopamine hit by paying yourself first. Every quarter, you’ll take a percentage of your profit account as a reward for yourself—whether that’s reinvesting in your business, taking a vacation, or buying something just for fun.

ADHD Hack: Use Visual Reminders

Visual reminders are key for those of us with ADHD. Whether it’s a sticky note on your desk, a colourful calendar notification, or a whiteboard with your percentages written out—use whatever helps keep the Profit First system front and center. The more visible the method is in your daily routine, the more likely you will stick with it. I have a monthly reminder and a spreadsheet (obviously) that does all the calculations for me, so it takes me less than 10 minutes each month. I also have resources so you can easily develop your plan. Grab them here!

How to Handle Impulse Spending in Your Business

Impulse spending can be a real challenge for ADHDers, and we aren’t immune to this in our businesses (hello pile of lightly used online courses 😬). When you’re using the Profit First method, the key is limiting what you can spend on operating expenses. This forces you to think more strategically about where your money is going.

If you feel the urge to spend impulsively on your business, check your operating expenses account first. If the money isn’t there, the purchase has to wait. The separation of accounts acts like a natural barrier to overspending. Check out this podcast episode for more help on impulse spending.

Want Help Implementing Profit First? Grab This Free Resource!

To help you get started, I’ve created a free guide that walks you through figuring out your percentages and it goes all the math for you!

Let’s Talk About Your Business Finances

If you’re overwhelmed or unsure how to start implementing Profit First for your business, I’m here to help. Book a free consultation with me to discuss support options and dive deeper into how you can manage your business and personal finances in a way that works for your brain and your business.

Starting and managing a business can feel like a rollercoaster—especially when ADHD is in the mix. We’ve got so much to manage that the money part of it often gets ignored. But with a simple, structured system like Profit First, you can take control of your finances without getting lost in the weeds. By paying yourself first, saving for taxes, and limiting what you spend, you’re setting your business up for long-term success. It’s time to eliminate that chaotic financial stress and start working with a system that makes sense for ADHD entrepreneurs.

You’ve got this.